Spot gold surged
to a lifetime high on Friday in thin holiday trade, hitting a record for
a sixth consecutive session on a weak dollar and factors ranging from
geopolitical uncertainty to inflation concerns.

Silver also raced to its
loftiest in 31 years, notching the milestone for a seventh straight day
and outstripping gold's weekly gains by a huge margin.

The ongoing euro zone
sovereign debt crisis, unrest in the Middle East and North Africa,
rising global inflation, and most recently worries over the fiscal
stability of the United States have fueled the record-breaking rally in
these precious metals.

Spot gold
rose to an record of $1,512.50 an ounce, before easing to $1,507.69 by
4:53 a.m. EST, on track for a weekly gain of 1.5 percent -- its sixth
consecutive week of gains.

Spot
silver hit $46.69 an ounce, its highest since 1980, on course for a
weekly rise of 8.4 percent, its biggest weekly increase in two months.

Silver
has gained 51 percent so far this year, and gold 6 percent. This
compares with a corresponding 1 percent rise in the London Metal
Exchange price of copper, the bellwether of the industrial metals
complex.

Supporting precious
metals, the dollar was languishing near a three-year low against a
basket of currencies, and could take a run at the all-time low hit in
2008, pressured by record low interest rates and the crushing weight of
the U.S. budget deficit.

So long as
the overall environment stays supportive and the dollar remains weak,
gold is expected to retain its strength. Price of bullion is seen to
rise to $1,700 an ounce by 2015, analysts polled by Reuters said in a
poll.

However, a correction might be on the horizon after the recent rapid ascent, traders and analysts said.

"Gold
is likely to consolidate around the $1,500-level next week," said Li
Ning, an analyst at Shanghai CIFCO Futures. "The angle of the recent
rally is very sharp, and we are bound to see some correction in the near
term."